Oil hovers at 3-month highs

oil.png By Blake Ellis, staff reporter


NEW YORK (CNNMoney.com) -- Oil prices are on an upswing this week, hovering at 3-month highs after surging past the $80-a-barrel mark on Monday.

Last week, prices drifted lower as ongoing worries about the pace of the economic recovery weighed on investors. But prices have turned around, rising more than 4% so far this week as some of these jitters ease.

Prices rallied to fresh 3-month highs on Monday and Tuesday and held steady Wednesday after an inventory report from the Energy Information Administration showed a bigger than expected drop in crude inventory.

"We've been up sharply this week, and it's the first time we've seen these highs since early May," said Mike Fitzpatrick, vice president of energy at MF Global. "The rally has kept its momentum based on the fact we've seen inventories drawn down, positive economic data, plus we couldn't really break any lower after last week."

The EIA said crude supplies fell by 2.8 million barrels last week, more than the 1.2 million-barrel drop expected by analysts, according to a consensus estimate collected by energy information provider Platts.

Gains were tempered, however, after the report showed that gasoline stocks rose 729,000 barrels, while analysts had forecast a decline of 870,000.

Prices have also been lifted by a weaker dollar, which has continued to weaken against the euro and the pound this week. Oil, like other commodities, is priced in dollars, so a weaker greenback boosts prices.

Meanwhile, stocks have seesawed, wavering as investors remain cautious ahead of the closely-watched jobs report due at the end of the week, which is expected to show that employers cut payrolls for a second straight month in July.

If the jobs report or any other economic data shakes investor confidence, oil prices are likely to slip from their current highs, said Fitzpatrick.

"It's going to be hard to sustain this rally given the fact that we are in such bad shape," he said. "I just don't know if the data we get will support the notion that the economy is turning around."  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.78%3.79%
15 yr fixed2.98%2.93%
5/1 ARM3.06%2.99%
30 yr refi3.85%3.85%
15 yr refi3.05%3.00%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 18,080.14 21.45 0.12%
Nasdaq 5,092.09 36.02 0.71%
S&P 500 2,117.69 4.76 0.23%
Treasuries 1.92 -0.03 -1.54%
Data as of 8:54am ET
Company Price Change % Change
Microsoft Corp 47.87 4.53 10.45%
Apple Inc 130.28 0.61 0.47%
Comcast Corp 59.64 0.41 0.69%
AT&T Inc 34.01 -0.22 -0.64%
Xerox Corp 11.99 -1.15 -8.75%
Data as of Apr 24

Sections

Shares in Italian bank Intesa Sanpaolo dropped sharply Friday after hoaxers claimed its CEO had quit after faking billions in profits. More

The impact of rising immigration on Britain's economy has become a hot topic in the election campaign. More

Apple is likely to post huge growth in sales and profits thanks to the popularity of the iPhone 6. Here's all the numbers to keep an eye on in the report. More

A Girl Scouts Cookie Oven rolling out to Wal-Mart, Target, Kmart stores this summer will let you bake those iconic thin mints right at home. More